The lake drains to the Caribbean Sea via the San Juan River, historically making the lakeside city of Granada, Nicaragua, an Atlantic port although Granada (as well as the entire lake) is closer to the Pacific ocean geographically. The Pacific is near enough to be seen from the mountains of Ometepe (an island in the lake). The lake has a history of Caribbean pirates who assaulted Granada on three occasions.[3] Before construction of the Panama Canal, a stagecoach line owned by Cornelius Vanderbilt's Accessory Transit Company connected the lake with the Pacific across the low hills of the narrow Isthmus of Rivas. Plans were made to take advantage of this route to build an interoceanic canal, the Nicaragua Canal, but the Panama Canal was built instead. In order to quell competition with the Panama Canal, the U.S. secured all rights to a canal along this route in the Bryan-Chamorro Treaty of 1916. However, since this treaty was mutually rescinded by the United States and Nicaragua in 1970, the idea of another canal in Nicaragua still periodically resurfaces, such as the Ecocanal proposal. In 2014, the government of Nicaragua offered a 50-year concession to the Hong Kong Nicaragua Canal Development Investment Co. (HKND) to build a canal across Nicaragua at a cost of US$40 billion, with construction beginning in December 2014 and completing in 2019.[4] Protests against the ecological and social effects of the canal as well as questions about financing have led to doubts about the project.[5]

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Lake ecology[edit]

Lake Nicaragua, despite being a freshwater lake, has sawfish, tarpon, and sharks.[2] Initially, scientists thought the sharks in the lake belonged to an endemic species, the Lake Nicaragua Shark (Carcharhinus nicaraguensis). In 1961, following comparisons of specimens, the Lake Nicaragua Shark was synonymized with the widespread Bull shark (C. leucas),[6] a species also known for entering freshwater elsewhere around the world.[7] It had been presumed that the sharks were trapped within the lake, but this was found to be incorrect in the late 1960s, when it was discovered that they were able to jump along the rapids of the San Juan River (which connects Lake Nicaragua and the Caribbean Sea), almost like salmon.[8] As evidence of these movements, bull sharks tagged inside the lake have later been caught in the open ocean (and vice versa), with some taking as little as 7–11 days to complete the journey.[6] Numerous other species of fish live in the lake, including at least 16 cichlids that are endemic to the general region (none are strictly endemic to this lake, although Amphilophus labiatus only is native to the Nicaragua and Managuau lakes).[9][10] A non-native cichlid, a tilapia, is used widely in aquaculture within the lake. Owing to the large amount of waste they produce, and the risk of introducing diseases to which the native fish species have no resistance, they are potentially a serious threat to the lake's ecosystem.[11]

Nicaraguans call the Lake Lago Cocibolca or Mar Dulce (literally, Sweet Sea; in Spanish, freshwater is agua dulce). The lake has sizeable waves driven by the easterly winds blowing west to the Pacific Ocean. The lake holds Ometepe and Zapatera which are both volcanic islands, as well as the archipelago of the Solentiname Islands. The lake has a reputation for periodically powerful, unnavigable storms.

In the past 37 years, considerable concern has been expressed about the ecological condition of Lake Nicaragua. In 1981 the Nicaraguan Institute of Natural Resources and the Environment (IRENA) conducted an environmental assessment study and found that half of the water sources sampled were seriously polluted by sewage. It was found that 32 tons (70,000 pounds) of raw sewage were being released into Lake Nicaragua daily. Industry located along the lake's shore had been dumping effluent for an extended period of time. Pennwalt Chemical Corporation was found to be the worst polluter. Nicaragua's economic situation has hampered the building of treatment facilities nationwide (see: Water supply and sanitation in Nicaragua).

The country's worst drought in 32 years (as of August 2014) is taking its toll on the lake, the Nicaraguan government has recommended citizens grow and eat iguanas over chickens to reduce water consumption,[12] yet plans for the Nicaragua canal through the lake are still unhampered, the lake is the nation's largest source of freshwater, in which the water quality during construction as well as during ship transits will be subjected to environmental accidents.